The Building (Fees) (Scotland) Amendment Regulations 2025: business and regulatory impact assessment

Section 3: Costs, impacts and benefits

Quantified costs to businesses

The direct costs to business will be primarily financial. As the fee structure remains the same, the process of applying the correct fee to a building warrant application remains the same. The increased financial cost to business is negligible in comparison to the resulting cost of construction/building works for warrant application.

The costs are as follows:

• Building warrant fee rates based on the value of works (VoW) will rise an average of 8%.

For example, the estimated cost (VoW) of a construction project is £100,000. The corresponding building warrant fee will rise from £1,178 to £1,274. A rise of £96 (8%).

• Fixed fees for building warrants for conversion and demolition will increase by 5% from £200 to £210.
• Fixed fees for amendments to warrants less than £5,000 or for extensions to warrants will remain the same.
• Where work has already started, warrants for demolition will increase from £250 to £300; a rise of 20%.
• Submission of a completion certificate where no warrant has been granted, the fee for demolition or conversion of a building will increase from £400 to £500; a rise of 25%.

Other impacts

As fees are set nationally and this approach equally applies an increase to fees throughout, it is unlikely this policy will be perceived an unfair to a specific group or business.

A possible but unlikely impact to businesses is the potential for businesses to be discouraged to apply for building warrants due to the increase in cost, and therefore discouraged to take forward their building project. This is an unlikely outcome due to the relative difference in cost between a building warrant application and the resulting cost of a building/construction project. As this stage, businesses will also have undertaken extensive work to achieve planning permission and development of a construction plan. Its should be noted, in Scotland, a building warrant must be applied for and granted before any construction work can be undertaken.

Scottish firms’ international competitiveness

This policy will not affect Scottish business’s ability to compete internationally.

As building warrant fees are invested into local authority verification services, improving service delivery, organisations and businesses should expect an improved level of service from local authorities increasing the attractiveness of capital investment.

Benefits to business

Building standards verification services will see an increase in investment over the next few years improving the level of service verifiers can deliver. This will result in more timely inspections and checks reducing the wait for sign off on certain stages of building works by the verifier. Other benefits include improved access for guidance and advice such as through the Scottish Building Standards Hub, and increased reliability and consistency of service across Scotland.

The rollout of the Compliance Manager position will assist businesses in completing and adhering to an enhanced compliance plans for complex projects, reducing the possibility of costly remedial works and reducing the time for verifiers to undertake verification of complex buildings or projects.

Verifiers Operating and Performance Frameworks is also being reviewed as part of the wider Futures Board work and will ensure verifiers continue to deliver an improved standard and consistent of service throughout.

Small business impacts

There is no change to the application process for a building warrant and therefore the impact to small businesses is limited. The impact will be primarily financial however, the increase in cost will be negligible to the resulting building work costs a small business will be undertaking.

A possible impact could be confusion of the correct building warrant fee. This will be mitigated and reduced by increased signage and advertisement with the correct links to guidance.

A free online fee calculator tool is publicly available to ensure the correct fee is applied to any building warrant application and is based on the estimated Value of Works of a building project. The calculator will be updated with the proposed fee levels and small businesses can use this relatively simple calculator to determine their fee. This process takes less than 5 minutes. Local authority verifiers can provide any additonal support or guidance to small businesses if required.

Investment

A further aim of increasing the fees is to support the delivery of a nationally consistent service and approach to compliance with building standards across all building warrant application types and sizes.

Time recording information as it becomes available will also help inform the appropriateness of BW Fee rises and how they fit with different types and sizes of LA Verifiers.

The development of the Compliance Plan approach although based on current national guidance (Verification During Construction) will for most verifiers require increased compliance activity from current levels as more applicant notifications are made and as notifications in the future become mandatory.

Any increase in compliance activity should not be a redirection of existing activity from plan checking, to site inspections and checks. The intention of increasing building warrant fees is that they should be sufficient to properly resource both approval and compliance workload so that verification can be delivered meeting all requirements within the Operating and Performance frameworks.

It will also be the case that different building warrant project work types will attract various levels of staff time/resource. Again, this aligns with the existing Verification During Construction guidance, where national guidance requires more complex projects to have proportionally more compliance actions.

Time recording of the time spent at the level of individual applications will allow Verifiers and Scottish Ministers to monitor the effectiveness of compliance checking against BW fees as this information builds up.

Workforce and Fair Work

This proposed policy will not affect the general workforce in organisations and businesses. Local authority verifier workforce will see an increase in investment as is required by the changes through the Future Board Programme. This could be through additonal training and development or increased numbers of staff.

This policy will not affect Fair Work First Principles.

Climate change / Circular Economy

This policy will not impact business’ ability to contribute to climate and circular economy targets.

Competition Assessment

This proposal does not have an impact on competition. Building warrant fees are set nationally and apply equally throughout Scotland, regardless of geographical location. Building warrant fees are applied to building warrant applications, verified by local authority verifiers.

The five Competition and Markets Authority (CMA) competition questions are asked below. A detailed competition impact assessment is not required.

1. Will the measure directly or indirectly limit the number or range of suppliers?

No, the policy relates to building warrant fees and does not affect suppliers.

2. Will the measure limit the ability of suppliers to compete?

No, building warrant applications are legally required and have no competition element.

3. Will the measure limit suppliers’ incentives to compete?

No, building warrant fees and building warrant applications have no competition element.

4. Will the measure affect consumers’ ability to engage with the market and make choices that align with their preferences?

No, if consumers need to apply and pay for a building warrant application, they must do so through their respective local authority.

5. Will the measure affect suppliers’ ability and/or incentive to introduce new technologies, products or business models?

No, this policy relates to building warrant fees and will not affect the introduction of new technologies, products or business models.

Consumer Duty

This policy is supporting the strengthening of building standards service throughout Scotland with the introduction of various changes through the Futures Board Programme. The overarching aim is to improve the performance, expertise, resilience and sustainability of the Scottish building standards framework and services across Scotland. This supports the main aim of building standards in Scotland by ensuring safe and complaint buildings. This would in turn benefit all consumers by an enhanced level of service provided by local authority verifiers and the access to specialist advice and expertise through the Scottish Building Standards Hub. The impact on consumers will primarily be financial as the application fee for a building warrant application will increase.

It's unlikely consumer will experience harm due to this policy and it is likely this policy will support the improvement of the building standards service, a public service, across Scotland. It is in the pubic interest to deliver more safe and sustainable buildings and this policy provides higher confidence that this will be achieved.

Consumer Scotland provides guidance on consumer duty and defines a consumer as individuals, small business and future consumers. Crucially, a business can be defined as:

“business” includes a profession, a not for profit enterprise (within the meaning of section 252(1F) of the Town and Country Planning (Scotland) Act 1997) and the activities of any government department, local or public authority or other public body”.

One of the main aims of this policy is support the strengthening of the building standards service, improving the level of service received by consumers. Alternative proposals considered included delaying this increase to building warrant fees. This would however potentially reduce any delays to local authorities investing and improving their service and in turn affect consumers down the line with a reduced level of service.

Work will be undertaken to understand the impact of fee increases, including the impact on consumers through performance quarterly data, Stakeholder Groups, Working Groups and Boards and direct engagement with those affected.